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Uk Recovery Under Threat!

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Service companies, which account for three quarters of national output, last month sold less and cut staff, according to the closely-watched Markit/CIPS purchasing managers index (PMI). Following a similar dip in construction output, experts said the UK economy appeared to have shrunk again in December.

Economists were quick to dismiss fears of a double-dip recession, however, pointing out that the services industry would have been particularly susceptible to December’s Arctic weather. The poor figures, though, took the gloss off strong manufacturing data earlier in the week, which showed that factories are growing at their fastest pace in 16 years.

“It seems that the two speed economy is back, but one where manufacturing and services have swapped positions,” said Nida Ali, economic advisor to the Ernst & Young ITEM Club. In the past decade, service industries such as banking have driven UK GDP while manufacturing was in decline.

Although the weather was blamed for the severity of the fall in activity in December, the survey also attributed part of the weakness to falling public sector demand in the face of the Govenrment spending cuts. It noted that this was likely to persist in the months ahead.

Wow the snow even caused jobs to be cut.

I just hope the recovery isn't derailed.

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After accounting for seasonal factors, the headline Business Activity Index registered 49.7, down markedly from 53.0 in November. Posting below the 50.0 no-change mark for the first time since April 2009, the index therefore pointed to a marginal decline of service sector output.

So, the Services sector is technically contracting. Input price inflation was also at it's highest since September 2008.

Full Press release: http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=7502

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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